Nigerian Breweries Plc · NSENG:NB
Nigerian Breweries — FY2022 Earnings Presentation
29 slides from Nigerian Breweries's earnings presentation, Feb 25, 2023
Slide 1: Conference Call: Full Year 2022 Results
PAGE 1 Conference Call: Full Year 2022 Results
Slide 2: Disclaimer
DISCLAIMER This presentation contains forward-looking statements with regard to the financial position and results of Nigerian Breweries activities. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in th
Slide 3: Content
CONTENT 1. Nigerian Breweries Plc. 2. Market Overview 3. Our Strategy to Win 4. BaBW 5. Financial Results 6. Outlook for 2023
Slide 4: Nigerian Breweries Plc. at a glance
Nigerian Breweries Plc. at a glance 18 Sales regions 9 Breweries with National Coverage 1 Malting Plant #1 in Lager, #1 in Malt, #2 in Stout 2,685 Employees NB Breweries Market Capitalisation Market Capitalisation Number of Shareholders Heineken N.V. (Naira) NB Malting Plants (US Dollar) Shareholdin
Slide 5: 2022: A Challenging year with various social and economic headwinds
2022: A Challenging year with various social and economic headwinds Inflation & Currency Forex scarcity Energy Crisis Devaluation Flooding Widespread Insecurity Spiraling brain drain 5
Slide 6: Short term, the Nigerian business environment remains turbulent
Short term, the Nigerian business environment remains turbulent Annual headline inflation Naira vs dollar devaluation in 2022 Nigerian Real GDP growth rate (y-o-y Percent) (Naira per 1 dollar) (q-o-q Percent) 5.01 4.03 3.98 24.13 3.54 3.11 21.47 2.25 18.24 17.13 15.6 0.51 13.87 0.11 Q2 Q3 Q4 Q1 Q2 Q
Slide 7: Long term, the fundamentals of Nigeria remain positive
Long term, the fundamentals of Nigeria remain positive Nigeria has a teeming young population that will In the medium to long term, Nigeria’s continue to serve as a huge addressable market now and GDP is still set to grow despite the in the future various hurdles it faces 7 Source: World Bank, Barcl
Slide 8: Our strategy to win
Our strategy to win Lead and Accelerate Premium Lager led by Heineken® Create Value in Mainstream Lager with our Regional Brands Intentionally Expand Beyond Beer (NADs and Adjacencies) Enhance RtC whilst improving Customer Experience Build Compliant Value Creating Digital Eco-System
Slide 9: Our Route to Consumer continues to expand
Our Route to Consumer continues to expand B2B (Quickdrinks) Telesales Presales (Sales Rep) Most of our digitally savvy customers Become modal touchpoint and Our front-line will become trusted will use B2B as their first point of provide full suite of issue management business advisors to drive custo
Slide 10: With our premium portfolio, we continue to leverage global platforms
With our premium portfolio, we continue to leverage global platforms that resonate with consumers
Slide 11: Our regional mainstream brands continue to promote cultural cues blended with modernity
Our regional mainstream brands continue to promote cultural cues blended with modernity Omoluabi Take Over Party ‘22 Ijakumo The Movie ’22 LIFE GIRLS INFLUENCERS ENGAGEMENT LIFE – AMBASSADOR CONTRACT SIGNING Goldberg Osun Osogbo Festival‘22 LIFE CELEBRATES WITH IGBO WOMEN AT 2022 TURU UGO LOTA CONCE
Slide 12: Our flavoured and non lager brands continue to excite consumers
Our flavoured and non lager brands continues to excite consumers through differentiated messaging and high energy platforms
Slide 13: We continue to lead with our Non-Alcoholic portfolio
We continue to lead with our Non – Alcoholic portfolio, driving differentiation with the launch of our new Energy-Malt, Zagg
Slide 14: The Ama (Enugu) Brewery Expansion
The Ama (Enugu) Brewery Expansion • Operational and online. 1st brew in October 2022 • Improved our production capacity from 3 million hectolitres to 4.8mhl • Key enabler to drive our Premium agenda • Expansion improving economic activities to the state • Expansion work is in full compliance with in
Slide 15: Brew a Better World 2022 Progress
KEYPROGRESS HIGHLIGHTS Brew a Better World 2022 Progress Carbon Water Gender Responsible 21 61,024 1 16,914 Carbon & NGX- listed trees planted Company with students educated Water-reducing in 2022 at highest number of against alcohol initiatives Olokemeji Forest female board abuse completed in We co
Slide 16: Key milestone towards zero carbon emission recorded in 2022
Key milestone towards zero carbon emission recorded in 2022 Hydro & Solar Power Project Solar panel installation in Enugu o NB and Konexa signed a Power Purchase Agreement to provide 100% renewable electricity to 2 Kaduna breweries through hydro power o NB & Cross boundary signed a $10m renewable en
Slide 17: Empowering Youth and Women in 2022
Empowering Youth and Women in 2022 • An intensive 3-month training programme in our host communities • Facilitated by local experts in youth capacity development • Graduation ceremony held simultaneously across all 6 locations in November
Slide 18: Unlocking the Full Potential of Our People
Unlocking the Full Potential of Our People We are investing in targeted capability building across different leadership categories and employee groups to guarantee business continuity. Performance Mgt. Leadership Functional (All Employees - Sales Health & Wellbeing (People Managers) & Supply Chain A
Slide 19: Financial results
• Full Year 2022 Financial results
Slide 20: Volume seasonality has returned after 2021
Volume seasonality has returned after 2021 Volume development 2018 2019 2020 2021 2022 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 20
Slide 21: Key financial indicators
Key financial indicators Highlights Net Revenue (₦ Billions) Cost of Sales (₦ Billions) - Pricing strategy has mitigated margin pressures from input costs 309.2 393.3 - Cost leadership strategy has secured 550.5 337.3 323.0 235.7 337.0 234.0 437.2 191.8 218.4 276.9 Cost of Sales growth at par with i
Slide 22: Financial Overview
Financial Overview Summary of Profit or Loss (₦ Billions) FY 2022 FY 2021 Change in % Revenue 550.5 437.2 25.9% Cost of Sales (337.3) (276.9) 21.8% Gross Profit 213.2 160.3 33.0% Operating Profit 52.6 41.8 25.7% Net financing expenses (34.5) (17.9) 92.7% Profit Before Tax 18.1 23.9 -24.4% Taxation (
Slide 23: Pricing mitigating the increase in input costs
Pricing mitigating the increase in input costs Operating profit bridge (₦ billion) +25.9% 113.3 (48.9) (16.5) (36.6) (0.4) 52.6 41.8 Operating Increase in Increase in raw Increase in Increase in Others (net) Operating profit 2021 net revenue materials and advertisement transportation profit 2022 con
Slide 24: Naira devaluation pressuring net profit
Naira devaluation pressuring net profit Net profit bridge (₦ billion) +7.7% 2.5 -19.3 10.7 12.9 6.8 0.2 13.9 Net profit 2021 Increase in Decrease in Increase in foreign Decrease in Others (net) Net profit 2022 Operating Profit Interest Costs, exchange losses income tax incl. reclass of expenses leas
Slide 25: Financial Position
Financial Position Summary of Financial Position 2022 2021 Change in % Property, Plant & Equipment 357.9 255.6 40.0% Right of Use Asset 9.8 12.4 -20.5% Inventories 83.3 62.1 34.3% Trade and Other Receivables 42.8 24.7 73.3% Cash 22.2 16.7 32.5% Other Assets 105.2 111.1 -5.3% TOTAL ASSETS 621.3 482.6
Slide 26: Proposed Dividends
Proposed Dividends ❑ 100% payout ratio ❑ Total dividend ₦13.9bn (2021: ₦12.9bn) ❑ Interim dividend paid @ ₦0.4 per share (₦3.29bn) ❑ Proposed final dividend @ ₦1.03 per share (₦10.58bn) ❑ Annual General Meeting to approve final dividend and election scheme: April 26, 2023
Slide 27: Key messages
Key messages • The Nigerian beer market fundamentals remain strong with a high growth potential. • Country volatility remains a high risk on macro-economic indicators, security and infrastructure. A peaceful political transition is expected despite intense campaigns ahead of the general elections. •
Slide 28: < oF Oo
< oF Oo
Slide 29: Thank You!
PAGE 29 Thank You!